Pinnacle Partners Face $27M Foreclosure Suit
by June 1, 2009 12:00 am 133 views
Bank of America NA filed a notice of foreclosure on Pinnacle Hills West LLC, Bill and Carolyn Schwyhart, and Robert and Frieda Thornton of Rogers.
The suit, filed in Benton County Circuit Court on May 12, claims a mortgage valued at $27.18 million in unpaid principal and accrued interest is secured by more than 64 acres in Rogers.
The land is part of the District at Pinnacle Hills, an 85-acre development on Pauline Whitaker Parkway that will be anchored by a prototype Wal-Mart Neighborhood Market, which is under construction.
Shirley Norton, spokeswoman for Bank of America, said BOA acquired the loan when it acquired LaSalle Bank NA of Chicago in 2007. Arvest Bank of Fayetteville is named as a plaintiff because it was a participant lender, she said.
According to the suit, there was unpaid principal of $26.89 million and $293,828 in accrued interest as of April 30. Interest continues to accrue at a rate of $2,427.57 per day.
The suit claims Pinnacle Hills is in default of the loan agreement, executed on Dec. 5, 2007, for failure to make interest payments for February, March, April and May of 2009.
The suit also claims the LLC is in default of the loan agreement because partners failed to make a payment of $6.15 million to Bank of America by Dec. 31, 2008.
According to the loan agreement, the amount of the loan available to the partners was not to exceed 50 percent of the appraised value of the property. In December 2008, the loan exceeded the appraised value by $6.15 million.
“Despite demand for payment, Pinnacle Hills failed and refused to comply with the payment requirement,” the suit states.
The suit also claims that an adverse change in the financial condition of the defendants constitutes an event of default of the loan agreement.
The suit lists active lawsuits that have adversely affected Schwyhart and Thornton’s financial condition, including suits filed by Sun Trust Equity Finance and Lease, General Electric Capital Corp., Big Horn Lodge Finance LLC, and J.B. Hunt LLC.
In a phone conversation with the Business Journal on May 26, Schwyhart said Pinnacle Investments was current under “the original terms of the loan.”
He said the bank changed the terms of the loan due to the partners’ involvement with ongoing litigation in several suits with Jet Ride.
Pinnacle Investment was formed in August 2007 by Bill Schwyhart and Robert Thornton when the partners separated from the Pinnacle Group, which is still made up of partners Johnelle Hunt and Tim Graham.
In February, Schwyhart told the Business Journal, that he and Thornton had a total debt load of around $100 million secured by performing properties. The group controls about 224,000 SF of class A office space in the Pinnacle Hills area of Rogers.
In March, the group sold the Alltel building at Corporate Park for $4.75 million to Great Southern Bank of Springfield, Mo., one of the group’s creditors. The building had been listed for $6.5.
The 28,026-SF building was 90 percent occupied with tenants including the Pinnacle Dental Group, Chambers Bank and Tomlinson Orthopedic Group.
Two other PI properties, the Walsh Building and Corporate Park Building H, are listed for sale at $8.8 million and $4 million, respectively.